WASHINGTON – U.S. gross domestic product expanded 1.8% at an annual rate in the first quarter, unchanged from the initial estimate, as consumer spending was revised lower and non-residential investments increased, the Commerce Department reported Thursday.
Consumer spending increased 2.2% annually, down from a 2.7% increase reported last month. The first quarter consumer spending increase was the lowest since the second quarter of last year.
Business investment for the quarter was stronger than the initial estimate, while businesses also spent more on building their inventories. Gross private domestic investment increased 12.3% annually, up from an 8.5% gain reported previously. Non-residential fixed investments grew 3.4%, up from 1.8% growth.
The change in private inventories added 1.19 percentage points to GDP, revised up from a 0.93 point contribution.
Economists polled by Thomson Reuters expected a 2.1% increase in GDP, according to the median estimate.
Personal consumption expenditures, excluding food and energy, dipped to a 1.4% increase for the quarter, revised down from a 1.5% gain reported in the advance report last month.
Exports and imports were both revised higher from the first estimate as the trade contribution to GDP remained flat. Exports increased 9.2% in the first quarter and imports increased 7.5%. The trade deficit for the quarter was $570.5 billion, from a $571.5 billion deficit reported last month.
Government spending fell 5.1% for the quarter, upwardly revised from a 5.2% decline initially reported. State and local spending fell 3.2% in the first quarter.
Corporate profits in the first quarter, reported for the first time in this release, increased by the smallest amount since the fourth quarter of 2008. After-tax profits fell $11.6 billion in the first quarter, following a $39.5 billion increase in the fourth quarter.
In the fourth quarter, GDP rose 3.1% while the core PCE deflator rose 0.4%.
